Gee, any guesses why CBS’ third-quarter advertising declined?
If you said NFL football tanking with the public, you get the blue ribbon.
According to Credit Suisse, the network’s declining NFL television ratings will send CBS earnings lower. Credit Suisse analyst Omar Sheikh stated:
We expect third-quarter network advertising to decline 3 percent (previously +1 percent), driven by soft ratings for both the summer schedule and for the start of the NFL season. With only one of the three content licensing deals we expected for the second half announced in third quarter, we also expect content licensing revenue growth to be skewed to the fourth quarter."
Sheikh lowered his third-quarter EPS estimate to $1.08, below Street consensus estimate of $1.12 from FactSet. As Investopedia explains, “Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.”
Sheikh added that CBS' Sunday NFL ratings have plunged 17% from the same period last year in which the first few games of the regular season were played.
It isn’t just CBS taking a hit; last week Sheikh reported that Twenty-First Century Fox's earnings had dipped due to the weak performance of the NFL. Stock in Twenty-First Century Fox has dropped almost 11% since January and almost 3% in the last month.